Uber is tanking after logging the biggest first-day dollar loss in US IPO history

The ride-hailing giant, which went public on Friday, six weeks after its rival Lyft, sputtered to a 7.6% loss in its stock market debut, wiping out $655 billion of investor wealth. When the dust settled, it was the biggest first-day dollar loss in US IPO history, according to an analysis from Jay Ritter, a professor at the University of Florida.

Prior to Uber’s loss, the largest first-day dollar loss was during the dot-com bubble of two decades ago. Genuity, an internet company spun out of Verizon, lost $277 million its first day.

Investors were watching Uber’s debut on the New York Stock Exchange closely after it priced at $45 a share, giving it a market capitalization of $75.5 billion. That was well below the $120 billion valuation that was floated in October.

Longer-term, investors are keen to see whether Uber will suffer the same fate as its smaller competitor Lyft. Its shares have been in a free-fall since debuting in late March, trading down 33% from its IPO price of $72.

Uber’s IPO comes at a turbulent moment in the financial markets, as an escalation in the US-China trade war has fueled a fresh wave volatility that rocked markets last week and weighed on sentiment Monday morning. The uncertainty around US-China trade relations took a toll on Friday.

“While it might be easy to call out ‘market conditions’ for these failings, the unvarnished truth is that these declines represent a fundamental disconnect between public and private valuations,” Nicholas Colas, co-founder of DataTrek Research, wrote in a note to clients on Monday about Uber and Lyft’s poor performances.

While the market doesn’t necessarily “care” about newly public companies turning a profit, Colas said, it does want to see operating cash flow, of which Uber and Lyft are “dramatically short.”

Meanwhile, Lyft shares were down 4% Monday, and hit a post-IPO low of $48.51.